Polygon Network Activates Mechanism to Burn a Portion of Transaction Fees

In the Polygon mainnet, at block 23 850 000, a mechanism to burn a portion of transaction fees was implemented, modeled on Ethereum. Activation occurred on January 18 at 05:48 (MSK).

Folks, #EIP1559 is a few hours away from going live on the #Polygon mainnet.

The highly-anticipated upgrade brings $MATIC burn and improved fee visibility.

Find out more: https://t.co/7fRxSZIrdv

— Polygon | $MATIC 💜 (@0xPolygon) January 17, 2022

The native MATIC token supply is capped at 10 billion, of which only 6.8 billion are in circulation, according to CoinGecko. The developers suppose that the protocol will burn 0.27% of the total MATIC supply annually. In their view, the deflationary effect will benefit validators and delegators.

With the update, the project team also abandoned the first-price auction model for calculating gas fees. As a result, users of dapps on the blockchain will receive more predictable fees.

Since Polygon is a network of secure second-layer solutions, token burning is a two-stage process that ends on the Ethereum blockchain:

“Burning is a two-stage process that begins in the Polygon network and ends in Ethereum. The Polygon team has created a public interface, where users can observe the process and participate in it.”

As part of the process, the tokens are transferred to a special address in the Polygon network. The withdraw() function, which guarantees that all coins will be burned, can be called by any address.

In the Ethereum network, the target smart contract has been deployed at the same address. After the procedure completes on Polygon, ERC-20 tokens are burned on the Ethereum blockchain. The corresponding function can also be called by any user.

At the time of writing, the Polygon network has burned 2,693 MATIC (~$5,924 at the current rate), according to Polygonscan.

In December 2021, a similar mechanism was deployed on the Mumbai testnet. Since then, the protocol has burned more than 100,000 MATIC.

Back in 2021, the Bruno hard fork on the Binance Smart Chain took place, during which developers also implemented a burning mechanism for a portion of transaction fees.